BILL ANALYSIS Ó
SB 767
Page 1
Date of Hearing: July 13, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
SB
767 (De León) - As Amended July 16, 2015
SENATE VOTE: 24-13
SUBJECT: Los Angeles County Metropolitan Transportation
Authority: transactions and use tax.
SUMMARY: Authorizes the Los Angeles County Metropolitan
Transportation Authority (MTA) to impose, subject to voter
approval, an additional transactions and use tax (sales tax) for
transportation. Specifically, this bill:
1)Deletes authority previously granted to MTA to extend an
existing .5% sales tax measure for transportation (Measure R)
by 30 years.
2)Authorizes MTA to impose, upon approval of the voters, an
additional sales tax in Los Angeles County for a period to be
determined by MTA at a rate that, when combined with Measure
R, shall not exceed 1%.
3)Specifies that the authorized tax is in addition to any other
tax MTA is authorized to impose or has imposed.
SB 767
Page 2
4)Requires the ordinance imposing the sales tax to include all
of the following:
a) An expenditure plan that lists the transportation
projects and programs to be funded from net revenues from
tax and includes specific project and program cost and
schedule data.
b) Provisions that conform to the Transactions and Use Tax
Law, the body of law that governs the process and
procedures for transactions and use tax ordinances.
c) Provisions limiting MTA's costs of administering the
ordinance and the revenues from the sales tax to 1.5% of
the total tax revenues.
d) A requirement that net revenues, as defined, from the
sales tax are to be used by MTA to fund transportation
projects and programs identified in the expenditure plan.
5)Requires MTA to develop a transparent process to determine the
most up to date cost estimates to be included in the
ordinance.
6)Specifies that the ordinance only becomes operative if
approved by two-thirds
of the voters voting on the measure.
7)Requires all projects listed in MTA's expenditure plan also to
be included in MTA's Long Range Transportation Plan if the
ordinance is approved by voters.
SB 767
Page 3
8)Allows MTA to incur bonded indebtedness payable from the net
revenues of the tax.
9)Exempts the sales taxes authorized by this bill from the 2%
combined tax rate limit for sales taxes imposed in any county.
EXISTING LAW:
1)Authorizes MTA, upon approval of the voters, to adopt the
following sales taxes for transportation in Los Angeles
County:
a) Two .5% sales taxes for an indefinite period of time
(Proposition A approved in 1980 and Proposition C approved
in 1990);
b) A .5% sales tax for 30 years (Measure R approved in
2008); and
c) An extension of Measure R for an additional 30 years
(Measure J was rejected by the voters in 2012).
2)Authorizes MTA to incur bonded indebtedness payable from the
proceeds of Measure R.
3)Requires MTA to adopt an expenditure plan prior to submitting
the proposed Measure R to the voters for a vote.
4)Allows MTA, subject to two-thirds voter approval, to extend
Measure R indefinitely. MTA placed a measure to do this
before the voters in November 2012 but it failed to achieve
the two-thirds threshold necessary for passage.
5)Authorizes cities and counties to impose sales taxes in 0.125%
increments in addition to the state's 7.5% sales tax; limits
the combined rate of all transactions and use taxes imposed in
any county to 2%.
SB 767
Page 4
6)Prescribes, under the Transactions and Use Tax Law, specific
requirements to be included in transactions and use taxes
ordinances.
FISCAL EFFECT: Unknown
COMMENTS: Existing law authorizes individual counties or
regions to impose sales tax within their jurisdictions for the
purpose of funding transportation services, programs, and
projects. Today, nearly 85 percent of the state's population
lives in a county in which an additional local sales tax is
levied for transportation. These counties, often referred to as
self-help counties, generate approximately $4 billion annually
for transportation.
SB 767 would authorize the MTA, upon voter approval, to impose
an additional sales tax in Los Angeles County for transportation
purposes. MTA, which is sponsoring SB 767, is exploring the
potential for a ballot measure to seek voter approval for
funding for additional transportation investments. The
authority granted in SB 767 will be necessary should the MTA
board decide to pursue the ballot measure.
Los Angeles is home to one of the nation's most congested
transportation networks. According to the Texas A&M
Transportation Institute's 2012 Mobility Report, an auto
commuter in Los Angeles spends an average of 61 hours stuck in
traffic per year and pays over $1,300 per year in lost time and
wasted fuel due to congestion. These numbers will surely
increase as the county's population grows by an estimated 1.5
million people over the next 30 years.
SB 767
Page 5
At the state level, investments to preserve California's
transportation system have not been sufficient to meet demand.
In real terms, funding has diminished while the demand and the
cost to maintain and operate the transportation system have
soared. Traditional fuel tax revenues are not keeping pace with
inflation, and the proliferation of fuel-efficient cars and
alternative fuel vehicles, among other factors, are reducing
this funding.
Consequently, local transportation agencies have turned to the
voters to provide the authority and funding for priority
transportation projects. These voter-approved sales tax
measures have addressed some of the transportation need at a
regional level. In Los Angeles, Measure R was approved by a
majority of the voters in November of 2008 and enacted a .5%
sales tax increase, in addition to the two .5% sales tax
measures already in place. The Measure R sales tax increase,
effective for 30 years, finances transportation projects and
programs, and accelerates those that were already in the
pipeline.
The author believes that, although Measure R is drastically
changing transportation in Los Angeles, further investment is
necessary. He has introduced SB 767 in the hopes that Los
Angeles County voters will approve an additional .5% sales tax
for transportation and allow MTA to further expand its transit
systems, address key highway needs around the county, support
local agency transportation programs, and improve the Metrolink
service.
Writing in opposition to SB 767, the Howard Jarvis Taxpayers
Association is concerned that
SB 767 exempts the proposed sales tax from the sales tax limit
SB 767
Page 6
(combined 2%) imposed on counties by existing law. The
association also argues that the sales tax is a regressive tax
and an increase will drive up the costs of goods.
Committee comments: There is no doubt that the state needs more
funding for transportation. In fact, the situation has become
so dire that the Governor just last month called for a special
session of the Legislature to immediately address California
transportation funding crisis, citing a $59 billion need for
maintenance and repair of the state highways alone. Estimated
needs for local streets and roads and transit far exceed that
number.
Whatever the outcome of the special session, even the cheeriest
predictions estimate that the funding solution will only
partially address the transportation needs in the state. SB 767
provides the opportunity for Los Angeles County voters to decide
whether or not to tax themselves to address the transportation
needs in their own region.
Related legislation: This committee heard and passed a similar
bill, AB 338 (Hernández). AB 338 authorizes MTA to impose, with
voter approval, an additional one half-cent sales tax for up to
30 years, subject to two-thirds voter approval. Similar to SB
767, AB 338 requires the ordinance imposing the tax to contain
specified information, including an expenditure plan to list the
transportation projects and programs to be funded from the tax.
However, AB 338 also requires the expenditure plan to include
measures that ensure revenues are shared equitably between
SB 767
Page 7
regions of the county and specifies that 20% of all revenues
derived from that tax be spent for bus transit operations and 5%
for rail transit operations. AB 338 is currently pending in
Senate Transportation and Housing Committee. Should these bills
continue to move through the Legislature, the author will need
to resolve this chaptering out conflict.
Double-referral: This bill passed out of the Assembly Local
Government Committee on
July 2, 2015, with a 6-3 vote.
Previous legislation: SB 314 (Murray), Chapter 785, Statutes of
2003, originally enacted provisions that authorized MTA to
impose, subject to voter approval, a 0.5% sales tax for no more
than six and one-half years for specific transportation projects
and programs. That sales tax was never imposed.
AB 2321 (Feuer), Chapter 302, Statutes of 2008, authorized MTA
to impose, subject to voter approval, a 0.5% sales tax for 30
years and required MTA to include specified projects and
programs in its long-range transportation plan. In November of
2008, more than 67% of Los Angeles County voters approved this
tax in a ballot measure known as Measure R.
AB 1446 (Feuer), Chapter 806, Statutes of 2012, authorized MTA,
subject to voter approval, to extend the existing sales tax
(Measure R) indefinitely. AB 1446 also required MTA to update
SB 767
Page 8
its expenditure plan prior to submitting the tax measure to the
voters. The measure was put before Los Angeles County voters in
November 2012 but failed to achieve the two-thirds threshold
necessary for passage.
SB 1037 (Hernández), Chapter 196, Statutes of 2014, required MTA
to update its expenditure plan and Long Range Transportation
Plan before placing another sales tax measure before the voters.
REGISTERED SUPPORT / OPPOSITION:
Support
Los Angeles County Metropolitan Transportation Authority
(Sponsor)
Amalgamated Transit Union
Associate General Contractors
Association for Commuter Transportation
Avvantt Partners
California Public Interest Research Group
SB 767
Page 9
City of Culver City
City of Santa Monica
DE Architects
Endangered Habitats League
Environment California
Green Communications Initiative
Hatch Mott MacDonald
Honorable Eric Garcetti, Mayor, City of Los Angeles
Kal Krishnan Consultant Services
LA River Revitalization Corporation
Los Angeles Community College District
Metro Gold Line Foothill Extension Construction Authority
Metropolitan Pacific Capital, Inc.
SB 767
Page 10
MNS Engineers
Mobility 21
Pacifica Services, Inc.
RailLA
SENER Engineering & Systems, Inc.
Solutions International
Southern California Association of NonProfit Housing
Southern California Contractors Association
Southern California Transit Advocates
Subway to the Sea Coalition
Transpo Group
V&A Incorporated
Westchester Neighborhood Association
SB 767
Page 11
Westside Center for Independent Living
Opposition
California Taxpayers Association
Howard Jarvis Taxpayers Association
Analysis Prepared by:Janet Dawson / TRANS. / (916)
319-2093